Travel company goes bust owing holidaymakers more than £3m in biggest collapse
since 2008

Thousands of British holidaymakers are facing summer chaos after an upmarket villa booking company went bust owing customers more than £3 million.

The collapse of Villa Parade has left travellers scrambling to get their money back and exposed the Association of British Travel Agents (Abta) to accusations it ignored warnings the company was in dire straits before it went under. The company’s collapse is the biggest in the travel industry since 2008.

Villa Parade had continued taking holiday bookings in the weeks before it went into liquidation at the end of May. But documents seen by The Telegraph show the owners of villas used by Villa Parade had been complaining they had still not been paid for the previous year’s bookings.

Villa Parade’s directors Ian and Simone Sheekey, who moved into a £1 million barn conversion in the Yorkshire countryside last year, were unavailable for comment last week.

Mr Sheekey, 49, and his 45-year-old wife have two villas, worth £1.5 million, in Majorca and last week two Range Rovers were parked outside their UK home.

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In total, Villa Parade, through its trading company Air Parade Ltd, had run up debts of more than £6.5 million - of which £3.3 million was owed to holidaymakers.

The company, which had been operating successfully since 1999, had 1,000 villas on its books in Spain, Greece, Portugal and the US and had boasted of being the third largest villa rental company in the UK.

Customers now have an anxious wait for the return of their money on villas booked for the summer.

Brian McLaughlin, the retired boss of HMV, the music and film retail chain, said he is owed £2,500 deposit on a villa in Majorca he had booked for three weeks in August for his family.

Mr McLaughlin, 64, said that he had contacted Abta in April after being warned Villa Parade was in financial difficulty. “Abta told me that as far as they were concerned Villa Parade was financially sound and met their stringent conditions of membership,” said Mr McLaughlin, “But Villa Parade stopped answering the telephone and the final time I went on their website the message said they had gone into liquidation. So much for Abta and their assurances.”

Abta has now written to Mr McLaughlin to tell him to reclaim his deposit from American Express, his credit card company.

Jon Williams, nutritionist to the Wales rugby team, was forced to pay twice for the same villa in Majorca - a sum of £2,500 to Villa Parade and a further £2,500 to another travel company which has taken over its bookings. His ten-year-old daughter suffers from cerebral palsy and Mr Williams had booked the same villa for the past few years because he knew it was suitable for his child’s special needs.

Having paid for the holiday home through Villa Parade, he then received an email from another company warning him that the money had not been passed on to the owner of the villa. If he wanted to stay in that villa, he had to pay a second time for his holiday in May.

Mr Williams, 42, from Tredegar, Wales, said: “We had been to the villa three times. It has an outdoor jacuzzi which is great for our little girl. I didn’t want to risk going to Majorca and finding I was barred from the villa. Once I was out there, it was clear Villa Parade was no longer operating and its office had closed down.

“Abta was reluctant to get involved. They were absolutely useless. Abta is there to protect its members, not the public.”

Travelopo, a rival villa rental firm, approached Abta in April to warn the association that Villa Parade was allegedly not paying the private owners and owed them money.

In a letter sent to Mr Sheekey on November 18 2013, a company called Business Resorts, which represents villa owners in Majorca, said: “As you know you still owe Business Resorts and the owners over 2.5m Euros and we want full payment of all outstanding monies.”

Business Resorts then approached Travelopo, a rival booking company, to take on Villa Parade’s contracts.

Roger Fenton, Travelopo’s managing director, said: “Abta knew of the problem for at least eight weeks. The Spanish owners came to us in desperation because they hadn’t been paid for a year and were owed 2.5 million Euros.

“Not only that, they had distressed holidaymakers turning up for accommodation they had booked through Villa Parade whose contract had been cancelled.

“We alerted Abta as soon as we realised the scale of the problem - which had clearly been brewing for well over a year. Abta should have acted faster.”

Travelopo claims to have evidence that some villas had been triple and quadruple booked by Villa Parade before it went bust.

A creditors’ report compiled by the insolvency firm O’Hara & Co, based in Huddersfield, details £6.5 million debts, including £3.3 million to holidaymakers. It also notes that Mr and Mrs Sheekey “are claiming ownership of [two villas] despite these properties being shown as assets in the Company’s balance sheet".

The report found there was no money in the company’s British bank account and that instead Villa Parade owed almost half a million pounds to NatWest Bank.

Chris Brooksbank, the company’s liquidator, told The Telegraph: “It is a messy one and we will not get answers overnight. We are talking some serious numbers here. In defence of the directors they have been fully cooperative.”

Villa Parade has blamed Travelopo for the demise of its business after Travelopo emailed some of its customers to tell them that Villa Parade had not been paying villa owners.

Villa Parade has complained that negative postings on travel websites such as TripAdvisor had wrecked consumer confidence in the company and led to its rapid demise.

Abta has defended its handling of Villa Parade’s collapse. A spokesman pointed out it had launched an investigation as soon as Travelopo raised concerns on April 9.

The spokesman added: “We will be working with the liquidator and other stakeholders to investigate the full circumstances of this failure, its causes and in relation to the recovery of all assets and losses.”

He insisted all customers will be reimbursed either through their credit card companies or through Abta. He said the process could take a few months but still leave holidaymakers time to book an alternative holiday.

The spokesman added: “The number of recent Abta company failures is at the lowest level in 20 years, but Villa Parade is one of the more significant in terms of forward booking.”